Customer experience (CX) isn’t just customer service, but rather encompasses every single interaction a customer has with your business. Everything from a first social media ad to an email campaign months after purchase is part of a customer’s experience. Hopefully, all of this coordinates to a positive and consistent experience across marketing, sales, billing, customer support and other departments.
Here’s what customer experience is, and how customer experience management could help you. Good CX helps keep your customers/clients returning to and recommending your business.
How do you define customer experience?
Customer experience is the full impression customers/clients form from the interactions they have with your business. Marketing, sales, product use, product support, customer service and billing are all part of these interactions that create a cumulative experience.
If you’re a local business owner, even how you interact with people in public can impact how they feel about your business. It really is every customer-facing interaction your business has.
Because all of these touchpoints affect how customers feel about your business, CX becomes cumulative. Even small interactions contribute to an overall bad, neutral or good perception for the customer/client.
Why is customer experience important?
Customer experience creates how customers feel about your business. How they feel directly influences how likely customers are to make additional purchases, and how much they recommend your business. Ultimately, how customers feel directly impacts your growth.
Today, customer experience plays an even bigger role in decision-making, with 73 percent of customers saying CX is the number one thing they consider when deciding whether to purchase from a company.
Customer retention
Positive customer experiences drive customer retention through increased repeat purchases. Retention is vital, as acquiring new customers almost always costs more than keeping current ones.
Reputation and reviews
It’s hard to overstate the importance that a positive reputation and good reviews have. Everyone today makes buying decisions based on what others say, and what’s said is a result of how people feel. Good CX contributes to good feelings, and good feelings contribute to positive reviews.
The converse, of course, is also true. Customers are apt to quickly post negative reviews after just one bad experience. That’s why it’s important to think of customer experience management across all interactions with people, and how to handle customer complaints.
Competitive differentiator
In the best cases, CX becomes a competitive differentiator. Think of Gen Z consumers who are loyal to brands because they like, even “love,” the company.
Products can be copied, but experiences are more difficult to replicate. Even product-focused businesses can create good experiences through thought-out CX practices.
Revenue growth
Investing in customer experience strategy isn’t only about creating a positive impression. Good CX ultimately is good for the bottom line. Customer-centric brands report profits that are 60 percent higher than those that fail to focus on CX, making CX a direct driver of revenue growth. It directly impacts the budget in multiple ways:
- Increased Repeat Sales: When people are happy with your business’s product/service, they’re more likely to make additional purchases. This is especially important for businesses that have high customer acquisition costs (e.g. B2B businesses, financial services), or that rely on smaller repeat purchases (e.g. subscriptions).
- Increased New Sales: New sales cost more to get, but also present more potential. For many businesses (e.g. landscapers), initial purchases are larger than repeat ones. New customers also provide additional opportunities for repeat sales.
- Lowe Acquisition Costs: Positive CX doesn’t always lead to lower customer acquisition costs, but it definitely can if more sales come from 5-star ratings and lengthy reviews. Think of an online business that sells primarily through Amazon, eBay, or Etsy. Showing up in search results because of high reviews is much cheaper than paying for sponsored listings.
- Reduced Churn: Happy customers are less likely to leave your business, reducing customer churn and again lowering acquisition costs.
- High Average Sales: Customers who come to trust your business are more likely to get add-ons, like a tasty pastry in addition to a latte. Cross-selling can be some of the easiest sales to make, and even small additional purchases (e.g. flavored syrup in a latte) have a notable impact when there are lots.
What is customer experience in business?
Customer experience is any interaction a customer has with your business. It certainly includes major interactions that customers mention in reviews, such as purchases, product performance, and complaints to customer service. It’s not just these, though. Any front-end interaction or back-end system that affects interactions is part of CX.
Some examples of CX and how they influence decisions include:
- Purchasing: Reducing buying friction increases sales. Clicking less, instant quotes and clear pricing make it easier to purchase.
- Responsiveness: People don’t want to wait. How quickly teams, including sales, support, service and billing, respond all affect satisfaction. This can include everything from wait times at a restaurant to how quickly emails get answered.
- Clarity: Your product pricing, shipping timeframes and return policies should all be easily understandable. Even if you can only provide custom quotes, at least say something like “contact us for a quote on the next business day.”
- Consistency: Consistency is a part of marketing. Is your brand the same across communication channels, and throughout the whole customer experience?
- Problem Resolution: Addressing complaints and complications well is one of the most important aspects of CX management. Any issue with your product, shipping or billing could create a negative CX. These are critical points in the customer experience, the ones that customers frequently mention in reviews.
From an employee level, it’s not always obvious how making a backend system more efficient improves the customer experience. From a management, and especially upper management perspective, every department deserves investment because they all impact the experience.
What is customer experience in marketing?
Customer experience begins before a purchase, and continues through any post-purchase campaigns. The point of purchase, or sales team, also heavily overlaps here.
The acquisition stage is when your business sets expectations. Expectations should be clearly communicated, honest and address actual customer needs. This is where an intuitive website, transparent pricing and consistent branding come in.
Additionally, make sure your business can deliver on the expectations that marketing and sales set. Over-promising and under-delivering are devastating to the CX.
What makes a great customer experience?
In the real world, there are many practical ways to positively influence customer experience.
Ease and simplicity
Customers value clarity. They want clear processes, simple website navigation, a smooth checkout, and quick resolutions if any issues come up. Simplicity isn’t just about convenience. It signals competence.
Website user experience (UX) is very much part of overall CX, and shows how much backend operations can contribute to the customer experience. Building a website that loads fast eliminates a major source of online frustration.
Consistency
Don’t create confusion over what your business is about, including in how you treat customers. Customers should experience the same tone, standard, and reliability across channels. Consistency is a strong driver of trust.
Personalization
Personalization serves to address specific customer needs, show appreciation for an individual customer, and differentiate your business. It’s more than putting a name at the start of an automated email. High levels of personalization are achieved by remembering preferences, sending only relevant communication, and offering easy customization.
This is another example of how back-end systems can impact CX. The customer relationship management (CRM) software you choose can make it easier or more difficult to personalize messages for customers. So can your production methods, as they determine how much personalization costs.
Responsiveness
Timely replies matter. Customers don’t want to be kept wondering, and they certainly don’t want to spend too much of their own time getting a response (e.g. waiting on hold, contacting more than once). Customers also expect you to provide transparent updates, take ownership of problems, and appreciate their point of view.
Intentionality
You don’t need expensive tools to accomplish great CX. In many cases, intentional and thought-out processes will outdo simply purchasing the most expensive software or tool.
What is customer experience strategy?
A customer experience strategy is a plan for intentionally designing and improving customer interactions. Without a strategy, CX becomes reactive. Proactive CX strategizing creates more positive interactions.
Mapping the customer journey
Start by mapping the customer journey, which goes from initial awareness to long-term retention. A standard customer journey map goes awareness → consideration → purchase → post-purchase → retention.
Identifying pain points
Once the journey is mapped, identify the biggest customer pain points. You can check what points customers drop off, submit queries, or appear to become confused. Pain points are where the CX is lowest, but offers the most opportunity for improvement.
Setting measurable goals
Although CX is largely about feelings, there are ways to quantifiably measure it. Some key performance indicators (KPIs) are:
- Net promoter score (NPS): How likely are customers to recommend you?
- Customer retention rate: How many customers make repeat purchases?
- Repeat purchase rate: How often do customers rebuy?
Aligning teams
Good CX requires that marketing, sales and service all work together as one large team. They need to understand how each department can aid the others, through things like sharing customer data. It’s important to have department-specific accountability, but also to help each other.
What is customer experience management?
Customer experience management (CEM) is the ongoing practice of monitoring and improving the interactions customers have with your business.
Like customer experience strategy, CEM takes a comprehensive approach. The difference between the two lies in how they each approach CX:
- Customer experience strategy: Planning how to improve CX.
- Customer experience management: Executing the strategy.
To do this, customer experience managers collect feedback, track satisfaction metrics, respond to complaints, refine processes, train employees, and help further develop strategies.
Customer experience vs customer service
Despite many using customer experience and customer service interchangeably, the two are distinct from each other:
- Customer service: Support and assistance provided directly to customers
- Customer experience: The whole customer journey.
Customer service is one part of the customer journey. While good customer service is vital to strong customer experience, so too is marketing, logistics, billing and other departments.
Common causes of poor customer experience
Avoiding and addressing poor customer experiences is one of the most important parts of developing strong CX. Poor customer experiences primarily arise from mistakes:
- Overpromising: Marketing that makes the product look better than it is.
- Information silos: When the sales team doesn’t know what the support team is doing.
- Slow response times: Making a customer wait for days for a simple answer.
- Complicated UX: An unintuitive website that’s difficult to navigate.
- Inconsistency: Not using a similar tone and branding across all messaging.
Note that not all of these are customer-facing. Many poor experiences (e.g. information silos, inconsistencies) stem from internal disorganization.
How small businesses can improve customer experience
You don’t need expensive tools to improve customer experience. Small changes can have a cumulatively large impact over time. Don’t look for a magic solution, but rather focus on incremental improvements that are practical for your business.
Simplify processes
Where can onboarding and checkout processes be less complex? Look at your forms, checkout flow and onboarding to see where you might simplify things.
Improve communication
Where can you better inform customers? Make sure your responses are clear, give customers the information they want, and customize whenever possible. Customization can be a major differentiator if you’re competing with larger businesses that can’t offer such a personal connection. Also, be proactive in notifying customers when something goes awry.
Use feedback intentionally
Actively seek out feedback through surveys, reviews, follow-up emails and newsletters. Don’t be afraid to directly ask customers their thoughts when you see them. People love having a voice, especially if it’ll help a local or small business.
Empower employees
Small business owners can’t do everything. There are simply too many tasks.
Empower your employees to make decisions and resolve problems when appropriate. You can then spend more time growing the business.
Building your business on a strong operational foundation
Again, strong customer experience requires both front-end and back-end processes that are well developed. Positive interactions are created by a strong operational foundation.
To that end, make sure your business has the processes in place so that you can provide outstanding customer experiences. You’ll want to have:
- Organized operations: Develop standard procedures and assign specific responsibilities, so employees can be empowered, held accountable, and know what’s expected.
- Clear documentation: Standardize any documents that are sent to customers, such as quotes or bills
- Consistent branding: Consistent branding develops a distinctive voice, and works better than a spattering of diverse messages.
- Professional formation: Even if you’re a sole proprietor, establishing your business as an LLC (or corporation) gives credibility. Forming an LLC can aid branding and build trust. Creating an LLC won’t alone create strong CX, but it’s one of those pragmatic ways to make an incremental improvement.
If you want help forming an LLC or otherwise building a strong foundation, Tailor Brands has a variety of tools available. Get assistance with LLC registration, creating a professional brand identity, and keeping organized business records.
Conclusion
Customer experience is the sum of every interaction a customer has with your business, and there’s not a single solution. Review the journey that your customers take, and identify places where pragmatic changes will make incremental improvements in CX, then take action by implementing these changes. So, whether you’re looking at how to start a small business or in the midst of growing it, investing in CX strategy and CX management could have a significant positive impact on your business’s future.